Vanquishing the dungeon

Posted on August 1, 2013 by Julia at Home on 129 Acres

This week, we have been reviewing Matt’s and my first basement renovation. Now it’s time for everyone’s favourite part: the befores and afters.

Here’s a reminder of where we started. The blue room before:

And here’s the no longer blue room after. The hot water tank is now accessible through louvered (vented) closet doors. The clothes closet to the left is now deep enough for a hanger.

The other side of the blue room before:

And after (slightly crooked complete with a Matt photo bomb). This nook under the stairs may look a bit tight, but a desk tucked in there perfectly and made a good study space.

The yellow room before:

The transformation in the yellow room was limited mostly to new flooring, paint and trim. Can I have a “so-long, see-ya” for that mustard paint? I did eventually say sayonara to the flourescent light fixture too, although I apparently don’t have a picture of that.

Another thing I don’t have a picture of that I really wish I did was an after of the hallway shelving area. Can you take my word for it that it looked better than this?

A few months after finishing the basement, we found the farm and listed our house for sale. By that point we had renovated it top to bottom. Within three weeks, our the house was sold.

Our first house was a good testing ground for Matt and me and prepared us for our forever house. Where, as always, the renovations continue.

Battling the dungeon

Posted on July 30, 2013 by Julia at Home on 129 Acres

On the quest to renovate the basement at our first house, Matt and I dove in with our characteristic “go big” approach.

Everything that was in the basement came upstairs and was stacked in the dining, living and bed rooms making for a lovely “Hoarders” atmosphere.

Downstairs, just like we would do a year later at the farm, we went back to the concrete. Buh-bye blue room.

And farewell weird shelving area.

We reframed. We rewired. We reinsulated.

We drywalled. Lots of drywall, although not as much as last summer. Lots of taping. Lots of pasting.

We laid new flooring, and we painted. We installed new trim, new shelving, new closet rods and doors.

Curious how it all turned out? Were we able to banish the dungeon?

Tune in next for the reveal.

Return to the dungeon

Posted on July 28, 2013 by Julia at Home on 129 Acres

I mentioned last week how grateful I am not to be renovating a basement this summer for the first time in three years. You’re all familiar with last year’s long running reno. I thought some of you might be interested in seeing the first basement that Matt and I tackled together. This was at our first house about six months before we sold it.

Our first house was a little one and half story. It was a former rental property and hadn’t been very well maintained (are you sensing a pattern here?). Before we even moved in, we had done a lot of work to make it a home for us, and we continued to work on it for the next five years that we lived there. However, all of our renovations had stopped at the top of the basement staircase.

We didn’t usually let people go down there. It was not a very good reflection of our style.

At the bottom of the stairs, there was a makeshift built-in shelving area complete with a heat register and electrical outlet. Please note how the trim is falling off and the drywall (and shelving) stops halfway down the concrete pillar.

There were two bedrooms where people actually slept before we moved in. One we called the blue room. It was covered in fake wood paneling that had been painted an eye searing shade of blue. We had added the shelving under the stairs to give us some temporary storage. The “closet” on the right wasn’t deep enough to hang a hanger.

A view of the other side of the blue room. The hot water tank is behind this wall. Accessing it required unscrewing a section of the patchwork paneling. Note the uneven ceiling tiles, the ugly fluorescent light and the bath towels used as curtains (okay, those were our special touch).

The other bedroom we termed the yellow room. This one was actually drywalled, but then painted an even worse shade than the blue room. Special features to note in this room, aside from the colour and the actual curtains, are the two heat registers within one foot of each other and the half carpet-half concrete floor.

Homey, no? Don’t you want to just move right in?

We were actively looking for our forever farm at this point, so we knew we had to do something about the basement before we could even think about listing our house for sale.

In the next post, I’ll show you exactly what we did.

Climbing the property ladder

Posted on December 2, 2012 by Julia at Home on 129 Acres

Everybody knows about the property ladder. Scrape your pennies together to buy a house and get on the bottom rung of the ladder. Eventually use the equity from your first house to move up the ladder until you’re able to (hopefully) afford to buy the house of your dreams.

The other week, I had the opportunity to talk to the Toronto Star about Matt’s and my experience with the mortgage on our first house. As I was preparing for the interview, it occurred to me that the lessons we learned might be interesting to some of you too.

Our first house got us onto the property ladder. It set us up to buy the farm and begin building our forever house. However, in order to go from our starter house to the farm, we had to skip a few rungs along the climb.

We were able to move up the property ladder quickly because when Matt and I sold our first house, we owned it free and clear. We had no mortgage.

For two 30-year-olds to pay off their first house in four and a half years is a bit unusual.

We didn’t win the lottery, no relative left us a big inheritance, we work regular jobs and earn average salaries, and our parents didn’t give us money to purchase either our first house or the farm.

So how did we pay off our mortgage early?

First, we bought a house we could afford. When we went to the bank to be pre-approved for our mortgage, we were astounded by how much we qualified to borrow. It was close to twice the amount we were expecting to spend. It’s easy to be sucked into spending more than you planned, especially if the bank says that you can. Be disciplined and stick to your budget.

The other thing that we did at the very start was to put down the biggest down payment we could. For Matt and me that was 25%. The hardest part of buying a house for many young first time buyers is building up their savings to make the down payment.

Fortunately, Matt and I were able to live with our parents and pay little or no rent. We saved and economized, and when we were ready to buy the house, we had enough (in my case just enough) to put 25% down. Making the largest down payment you can at the beginning puts you much further ahead in paying off your mortgage over the long term.

The biggest thing that helped us to pay off our mortgage in four and a half years was taking advantage of the accelerated payment plans our bank allowed. To start, we chose a “weekly rapid” plan where we made a payment every single Friday for a total of 52 payments a year. The amount of the payment was determined by taking what we would have paid monthly, dividing it by four and then paying that amount each week. This works out to basically making 13 months of payments rather than 12.

I remember sitting in the bank going over the payment options with the mortgage advisor and her showing us that by making just one extra month of payments a year, we would pay off our 25 year mortgage in 21 years. That was an easy choice for us.

However, 21 years wasn’t fast enough.

The other option we took advantage of was to make lump sum payments directly against the principal of our mortgage. For our bank, the maximum they allowed was 15% per year. Every single year, Matt and I took full advantage of this, and every single year we knocked roughly another 5 years off our mortgage.

I’m not saying it was easy to see that much money going out of my bank account each year, but getting a printout showing our mortgage would be done in 15, 8, and then 3 years did soften the sting.

The Amortization Period line at the bottom is the one to keep your eye on.

Most banks will also allow you to increase the the amount of your weekly (or biweekly or monthly) payments. We did eventually bump up our weekly installments, but for the most part we focused on saving for the annual lump sum payments.

With any financial situation, I think it’s really important to watch your numbers and understand exactly where your money is going. We requested extra statements from the bank that showed the breakdown of exactly how much of our weekly payments went towards principal and how much was interest. When the ratio finally crossed 50-50 with even just a few more dollars going towards principal than interest, that was cause for celebration. We also kept an eye on the amortization period that changed every time we made a lump sum payment and carefully read our annual statements.

Interest and principal mortgage payments

It will likely take a few years, but eventually you will pay more principal than interest.

Because we know our numbers, we know that we paid just over $20,000 in interest on our mortgage. This is versus nearly $200,000 in interest we would have paid if we stuck with the bank’s schedule and taken the full 25 years to pay off our mortgage.

Despite Matt’s and my focus on our mortgage, we did try to keep a balance in our life. Prioritizing our mortgage was important to us, but having a life was too. In the time that we owned our first house, we got married (and paid for our wedding), traveled, furnished our house and renovated. If we had put all of our money towards only our mortgage, I don’t think we would have enjoyed our house in the same way we were able to.

So here are my five tips for how we paid off our mortgage in less than five years:

Buy the house you can afford.
Put as much down as you can.
Take advantage of accelerated and lump sum payment plans.
Watch your numbers.
Prioritize what’s important to you.

Now at the farm, we have a mortgage again, and it’s much bigger than it was on our first house. However, it’s still affordable for us. We’ve again chosen an accelerated payment plan of 13 months of payments per year. And we’re already planning on making a lump sum payment before the end of the year. (Note, lump sum payments are usually calendar year, not mortgage year, so even though we’ve only owned the farm for 8 months, we can still make a payment against the principal).

Our first house put us on the property ladder, and the strong financial foundation we built by paying off our mortgage early allowed us to quickly move up the ladder.

We won’t pay the farm off in five years like we did at our first house, but we’re not satisfied to wait the full term of our mortgage either.

Now it’s your turn. Do you have a mortgage? What’s your approach to payments? Any tips to share?

Farm flora

Posted on June 6, 2012 by Julia at Home on 129 Acres

I’ve been having fun watching all of the flowers coming up around the farm this spring. It’s been a process of discovery as I figure out what that green shoot is and what’s planted over there.

I believe this is Solomon’s Seal

Orange lilies behind the house

Snow on the mountain. This plant grows like crazy at my in-laws’ place, but I couldn’t get it to take at our old house. It turns out that the farm is home to a very robust crop.

Red Japanese maple and bright green ferns at the corner of the house

Beautiful lily of the valley. Another plant that I couldn’t get to grow at the old house.

Forget me nots (and maybe a some strawberry blossoms at the top)

Purple iris at the south side of the house

Our most common flower at the farm: the dandelion

What’s your favourite spring flower? Anyone else have a successful dandelion plantation?

Farewell first house

Posted on May 1, 2012 by Julia at Home on 129 Acres

The sale on our first house officially closes today.

We listed the house for sale right after our offer was accepted on the farm, and it sold within three weeks. But due to a long closing date, we’ve technically owned two houses for the past two months.

This house was a great starter home for us. It was the perfect size for two people, and we had plenty of opportunities to practice renovating and fixing up a home.

On my last visit to the house, Matt’s tulips were just beginning to bloom in the front garden that we put in together.

The trees were starting to come into leaf.

When we first saw the house, we were attracted by the mature trees in the backyard and were so excited by the fact that we owned them. Now we own hundreds of trees, and we value them just as much.

We knew all along that this house was just the start for us. Our time there made it possible for us to be at the farm now. It was a wonderful five and a half years.